Supply Chain Management For Dummies, 3rd Edition

Chapter 3

Evaluating Your Supply Chain Strategy

IN THIS CHAPTER

Establishing your supply chain priorities

Balancing cost and value

Compromising to improve results

Before you can manage something, you have to understand how it works and what you want it to do. A supply chain is no exception. Many kinds of supply chains exist, and each of them needs to deliver a different kind of product or service to meet customers’ needs. In this chapter, I cover the factors that define how a supply chain performs and how each factor affects costs. Then I discuss how trade-offs are managed in every supply chain.

Prioritizing Supply Chain Goals

A friend of mine has a sign on her desk that reads “Good, Fast, Cheap … Pick Any Two.” When you’re managing a supply chain, you have to figure out what’s most important to you and be willing to compromise on the rest.

Step 1: Understand what customers value

To set priorities in a supply chain, start with your customers. The purpose of a supply chain is to deliver value to a customer, so your first step in engineering and managing a supply chain should be to understand exactly what your customers value. They may value having a wide assortment of products ...